NU Online News Service, May 7, 5:27 p.m. EDT
American International Group bettered its first quarter loss from last year by close to $2.5 billion, but reported a net loss of more than $5 billion, while admitting that negative publicity is affecting underwriting.
The company blamed the loss on restructuring and market disruption-related charges and accounting charges related to taxes.
For the first quarter of this year, the New York-based insurer reported net loss of $5.13 billion or adjusted net loss per share of 97-cents a share compared to net loss of $7.73 billion or adjusted net loss per share of $1.41 in 2008.
The company reported net loss attributable to AIG of $4.35 billion, or loss per share of $1.98, reflecting accounting difference for properties the company has minority interests in.
The company reported first quarter net premiums dropped 17.5 percent from $12.1 billion in 2008 to $9.95 billion. The company's combined ratio eroded 5.52 points to 101.96.
AIG reported general insurance first quarter operating income stood at $446 million, down from $1.6 billion in the first quarter of 2008. The company said the results reflect $483 million operating losses at United Guaranty Corp. and decline in investment income.
The company said net premium written was adversely affected by "the negative AIG publicity and the broader impact of the economy which is decreasing ratable exposures on renewal business and limiting new opportunities across other lines of business."
The company said retentions were "moderately lower" than in prior periods, but retention levels have improved since the end of this first quarter. Commercial insurance rates are flat, AIG said, an improvement over the 2008 fourth quarter.
Another profitable line for AIG, its Private Client Group for high end personal risks, saw a decrease of 2.3 percent to $210 million in net premium written for the quarter.
Net loss and loss adjusted reserves for general insurance at the end of the quarter totaled $72.3 billion, a decline of $201 million from Dec. 31, 2008, AIG said.
(This story was updated May 8 at 10:51 a.m.)
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